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CMA Intermediate · Management Accounting · Introduction to Management Accounting

Which of the following statements about the scope of management accounting is correct?

Management accounting's scope includes budgeting, cost analysis and decision support for internal management. It uses financial and cost data to aid planning, control and decisions. Statutory statements, bookkeeping and cost audit are not its core scope, which makes the internal decision-support option correct.

  1. AIt covers only the preparation of statutory financial statements for shareholders
  2. BIt is confined to recording transactions in the books of account
  3. CIt includes budgeting, cost analysis and decision support for internal managementCorrect
  4. DIt is restricted to the audit of cost records under the Companies Act

Explanation

Management accounting draws on cost and financial data to support planning, control and decision making inside the organisation, so budgeting, cost analysis and decision support fall within its scope. Statutory financial statements belong to financial accounting, and recording transactions is bookkeeping. Cost audit is a separate statutory function.

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